Back with a vengeance

Remember Maurice “Hank” Greenberg? Well, he’s back – and this time, with a vengeance. It can be recalled that Greenberg was unceremoniously removed as Chairman and CEO of the American Insurance Group (AIG) in 2005 amid allegations that the insurance firm violated securities and accounting practices and cooked its books to defraud the public and inflate AIG’s value. Then – New York Attorney General Eliot Spitzer filed criminal charges against Greenberg in a relentless probe that forced the billionaire to quit his post from the insurance giant.

But it seems the weather has quickly changed for Greenberg, who is now questioning how AIG incurred a record $7.8-billion loss in the first quarter. The 83-year-old businessman, reportedly worth $3.6 billion and is said to be the largest individual shareholder of AIG, wrote the board urging them to postpone the annual general meeting by two weeks to give shareholders enough time to decide what they want to do in the wake of the company’s financial crisis.

Obviously, there’s no love lost between Greenberg and the top executives of AIG. The company recently filed a case against the former CEO and several former company executives, alleging that they misappropriated some $20 billion worth of company stocks for personal benefit. Greenberg is the head of Starr International Co., the largest shareholder of AIG that was created to protect the insurance firm from a hostile takeover.

Along with the other Starr executives named in the lawsuit, Greenberg had been vocal in his criticism of the management of AIG. Since Hank’s departure, share prices have been steadily declining, so far down by 34 percent this year. In his letter to the AIG board, Greenberg wrote the “AIG is in a crisis,” claiming that the recent losses have led to a “complete loss of credibility with the investment community.”

While Greenberg, who was CEO of AIG for 40 years before his forced resignation, denies speculations that he wants to return to the company in any official capacity, his criticisms are putting a lot of pressure on Martin Sullivan who took over in 2005. Sullivan’s allies however point out that AIG’s problems started when Hank was still the CEO. On the other hand, several shareholders are contemplating the removal of Sullivan, saying he underestimated the problem and that he gave false assurances which seriously put his leadership ability in question.

Hank’s former nemesis Eliot Spitzer has now been totally wiped out by a scandal involving a high-priced international prostitution ring which forced him to resign as governor of New York last March. The hypocritical Spitzer had been publicly going after prostitution rings but it turns out he had been patronizing the very establishments he was supposedly running after even when he was still New York’s Attorney General. Spitzer certainly earned a lot of enemies for going roughshod over a number of Wall Street executives and business honchos. There are many rumors that Greenberg himself had a hand in Spitzer’s downfall with his vast resources. One must never forget – wealth is power – which can easily be used to turn the tables. 

The comeback of Hank Greenberg simply confirms Erap’s well-known “weather-weather lang ‘yan” adage. Joseph Estrada is a good example with his astonishing comeback after being detained for over six years. His comeback of course is courtesy of GMA’s presidential pardon for which unfortunately, he has not shown any clear indication of gratitude. But some say it’s purely politics on the part of the former president; nothing personal. Joseph Estrada is indeed back and it looks like he may even run for the presidency. But many close to him say he is simply positioning himself to be a kingmaker and working to unite the opposition.

While there’s every reason for GSIS head Winston Garcia to demand more transparency on how Meralco is being run, it should be done through legal means and in a more civilized manner instead of stoking public outrage against the Lopez family and the power distribution firm. People must remember – the world is round, and what goes around, comes around.

After 1986, the Lopezes came back and built up their lost business empire. The 2010 elections is not too far away, and vice president Noli de Castro is high up in the ratings and surveys on the presidential race.  Wealth is power, and if you have both in abundance – people must not underestimate what these can do.

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